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BUA Cement’s Energy Costs Rises By 65% To N43.58 Billion In H1 2022

BUA Cement’s Energy Costs Rises By 65% To N43.58 Billion In H1 2022

BUA Cement’s Energy Costs Rises By 65% To N43.58 Billion In H1 2022

BUA Cement’s Energy Costs Rises By 65% To N43.58 Billion In H1 2022

According to BUA Cement Plc, the company’s fuel and electricity consumption rose from N26,466 billion in HY 2021 to N43.580 billion in HY 2022, a 64.66 percent rise.

In comparison to the overall cost of sales of N66.157 billion recorded in 2021, this amounts to 45 percent of the entire cost of sales in the first half of 2022, which was N97.503 billion.

ALSO, READ BUA Cement Seeks Loan To Expand Company In Sokoto

Cost of raw materials increased by 48.23% from N18.896 billion in 2021 to N28.009 billion.

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Volume expansion and cost inflationary pressures were the causes of the increase.

Due to higher production volumes and rising gas and fuel prices, energy costs had a major role in Nigeria’s manufacturing cost growth.

The company, like its competitors, saw a sharp rise in the price of raw materials and energy. While some of these price pressures were brought on by the Naira’s depreciation, others were brought on by macroeconomic inflationary pressure, particularly in the domestic market where inflation kept rising.

ALSO, READ Maximum Lending Rate In Nigeria To Rise Above 30%

Although the import of raw materials and the associated foreign exchange load has continued to be a hindrance, it is not the only issue contributing to the less than stellar performance of manufacturers.

BUA Cement’s Energy Costs Rises By 65% To N43.58 Billion In H1 2022

The lack of infrastructure, particularly a reliable electrical supply, the high price of petroleum products, a bad road system, many taxes, fierce competition, and high import levies and tariffs are some of the additional issues facing the sector.

For instance, even years after the power industry was privatized, manufacturers have yet to notice any discernible increase in the supply of electricity, requiring them to rely significantly on internal power supplies at a significant expense. However, power is the only essential infrastructure needed to grow the manufacturing sector and add jobs.

Key Financial Highlights

  • However, the company reported posted a profit after tax of N61. 363 billion for the half year ended June 2022 as against N43.395 billion in 2021, accounting for a growth of 41.41%.
  • Profit before tax rose by 50.68% to N74.891 billion from N49.700 billion in 2021.
  • Revenue grew to N188.561 billion in H1 2022 from N124.277, representing an increase of 51.73%.

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In case you missed it

  • BUA Cement Plc has said that it is contemplating capital raising for capacity expansion of BUA Cement’s integrated cement plant in Kalambaina, Sokoto State, Nigeria which shall include increasing its capacity from 2.0 million tons per annum (MTPA) to 8.0 MTPA.
  • According to a statement obtained from Nigerian Exchange Limited (NGX), the company said “In furtherance of our disclosure obligations pursuant to Chapter 17 of the Rulebook, BUA Cement Plc hereby notifies Nigerian Exchange Limited (NGX), its esteemed Shareholders and the investing public that the Company has gone into discussion with the International Finance Corporation (IFC), serving as lead arranger in conjunction with a number of other lenders in a syndication pool, to obtain a loan for the expansion of BUA Cement’s integrated cement plant in Kalambaina, Sokoto State, Nigeria”.
  • The expansion according to the statement signed by Hauwa Garba Satomi, Deputy Company Secretary shall include increasing its capacity from 2.0 million tons per annum (MTPA) to 8.0 MTPA and the development of other ancillary utilities (the Expansion Project).

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IBEH C. JOE

Financial analyst, Entrepreneur, Blogger and Business model

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